Cephalodia are pockets of cyanobacteria. They either grow on the outside surface of the thallus lobe, on the outer surface of a pseudopodetium, or inside the thallus between the outer fungal layers. They only occur in lichens that have a green alga as a primary algae. Cyanobacteria (also called bluegreen algae) are very important to us all because they make the nitrogen in the air usable by plants.

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